"Do I charge VAT to my US client?" is the question every UK freelancer who lands an overseas client suddenly needs to answer. The rule is simpler than the gov.uk pages make it look — but the wrong answer can either overcharge a customer (and risk losing them) or under-collect VAT (and trigger an HMRC assessment). Here's the practical playbook.
The general rule for services
UK VAT applies to a service if the place of supply is the UK. For services, that depends on whether the customer is a business (B2B) or a consumer (B2C):
- B2B services: place of supply is the customer's country. So if you're a UK freelancer with an overseas business customer, the place of supply is overseas — UK VAT doesn't apply. Reverse charge in the customer's country handles it.
- B2C services: place of supply is the supplier's country. So a UK freelancer selling to a US consumer charges UK VAT (20%) by default, with carve-outs for digital services (see below).
This is the "general rule" — it's the default. There are specific exceptions for certain service types (land-related work, events, restaurant services, passenger transport) where the place of supply follows the physical location of the service.
B2B in practice — how to invoice
The mechanics for B2B overseas customers:
- Establish the customer is a business. EU customers: get and validate their VAT number on VIES. Non-EU customers: keep commercial evidence (website, contracts, business address).
- Invoice with no VAT line. Show £0 VAT and the reverse-charge wording (see our reverse-charge guide for HMRC-accepted wording).
- Include the sale in Box 6 of your VAT return (total sales excluding VAT). Don't add anything to Box 1 — the customer accounts for VAT in their own country.
- Keep the evidence — VIES screenshots, contracts, customer's business address — in case of audit.
The same revenue still counts toward the £90,000 VAT registration threshold, even though no UK VAT is charged.
You're a UK web designer billing a US software company for a 3-month project. They're a Delaware C-corp; you've got a signed contract.
Place of supply: US (customer's country). UK VAT charged: £0.
Invoice: £8,000, "VAT: 0.00 — outside the scope of UK VAT, customer to account for any local sales tax/VAT in their jurisdiction."
On your VAT return: £8,000 in Box 6, nothing in Box 1.
Customer: US has no federal VAT/GST, so usually no action on their side (state-level sales tax rarely applies to professional services).
You're a UK consultant billing a French SME for an audit. They've given you their FR VAT number (validated on VIES).
Place of supply: France. UK VAT charged: £0.
Invoice: €5,000 (or GBP equivalent), "VAT: 0.00 — reverse charge: customer to account for VAT in their member state under Article 196 of Council Directive 2006/112/EC."
On your VAT return: the GBP equivalent in Box 6.
Customer: self-accounts for French VAT (TVA) at 20% on their own return, then reclaims it the same quarter — cancels out, no cash impact for them.
You're a UK developer building an app for a Singapore startup with a SG-registered company.
Place of supply: Singapore. UK VAT charged: £0.
Invoice wording: "VAT: 0.00 — outside the scope of UK VAT. Customer is responsible for any local GST/withholding."
Customer: may self-account for Singapore GST (currently 9%) under their reverse-charge rules if they're not GST-registered, or simply reclaim if they are. Singapore also has a tax-treaty-based withholding tax regime on certain service payments — the customer may withhold ~15% from your payment. You'd reclaim that against UK corporation tax / income tax (via the foreign tax credit) — not against UK VAT.
B2C — where it gets fiddly
For B2C services to overseas consumers, the default rule says UK VAT applies (place of supply = supplier's country). So a UK accountant who advises a consumer in Italy on UK tax issues charges 20% UK VAT.
But there's a major carve-out: digital services sold to EU consumers are taxed at the consumer's local rate, not UK rate. This catches all sorts of solo-business income — Substack subscriptions, online courses, downloadable software, ebooks, downloadable templates, paid newsletters.
Digital services to EU consumers — the OSS scheme
Since Brexit, UK businesses selling digital services to EU consumers have two options:
- Register for VAT in every EU member state where you have consumers (impractical), or
- Register for the non-Union One Stop Shop (OSS) in one EU country (typically Ireland) and use it as a single point for all EU consumer VAT.
OSS lets you submit one quarterly return covering all EU sales, with VAT calculated at each customer's local rate. There's no minimum threshold — even £100/year of EU B2C digital sales triggers the obligation. The simpler alternative: use a platform like Gumroad, Substack or Lemon Squeezy that handles EU VAT compliance for you as a "merchant of record".
You sell a £49 online course direct from your website. Last year: £4,000 from UK consumers, £1,500 from EU consumers (mostly Germany, France), £500 from US/rest-of-world consumers.
UK consumers: charge UK VAT (assuming you're VAT-registered) at 20%.
EU consumers: charge VAT at the local rate of each country (Germany 19%, France 20%, etc.). Register for the non-Union OSS in Ireland and file quarterly.
US/rest-of-world consumers: the general rule (UK VAT 20%) technically applies, but each non-EU country has its own digital-services tax rules — practically, most UK freelancers don't register in those jurisdictions and rely on the de minimis their local rules typically include.
Operationally: most freelancers in this position migrate to a merchant-of-record platform (Gumroad, Lemon Squeezy, Paddle) that handles all the international consumer VAT for a ~5-7% transaction fee — a much cheaper alternative to OSS registration plus the admin.
The main exceptions to the general rule
- Land-related services (architecture, surveying, real estate, hotel accommodation): place of supply is where the land is, regardless of where the customer is. A UK architect designing a building in Spain charges Spanish IVA (or registers there).
- Events (admission, exhibition stands, conferences): place of supply is where the event physically takes place. A UK conference speaker billing for a Berlin event charges German VAT.
- Restaurant/catering services: place of supply is where the service is physically performed.
- Passenger transport: place of supply is where the transport happens.
- Hire of means of transport (short-term hire <30 days): where the vehicle is put at the customer's disposal.
No — same as any other EU B2B customer. Place of supply is Ireland, reverse charge applies. Even though Ireland-UK trade has cleaner political alignment than other EU countries post-Brexit, the VAT mechanics are the same as for France or Germany.
Northern Ireland sits in the UK VAT system for services (same as the rest of the UK). For goods, NI follows a hybrid arrangement under the Windsor Framework — but services are UK-domestic.
No. The currency you're paid in is irrelevant to the VAT treatment — what matters is the place of supply rule and the customer's status. Convert to GBP at the date-of-supply exchange rate (or HMRC monthly rate) for your VAT return.
You generally can't — you're not registered in their country and not authorised to collect their VAT. The correct answer is reverse charge: they self-account for their local VAT in their own return. Some customers (often US ones not familiar with reverse charge) get confused — link them to the reverse-charge wording on your invoice, which makes it explicit.
Reverse-charge sales to overseas B2B customers count as zero-rated UK supplies for threshold purposes — yes, they count toward £90,000. Sales to overseas consumers that are taxed in the overseas country (e.g. via OSS) don't count toward the UK threshold.
Some countries (e.g. Singapore, India, parts of Latin America) require local businesses to withhold a percentage of payment to overseas service providers as a credit against the provider's local tax. This is income tax, not VAT — you'd reclaim it against UK corporation tax / Self Assessment via the foreign tax credit, with reference to the relevant UK tax treaty. Cleaner to ask the customer up front whether they'll withhold so you can factor it into pricing.
Usually no — US sales tax is state-level and rarely applies to professional services. Your invoice can be presented as a single line at the agreed fee, with no tax added. The US client just pays the invoice.
General guidance on UK VAT for international services. Not personal tax advice. For high-value international work, EU OSS registration, or jurisdictions with bilateral tax treaty complications, consult a VAT specialist.